Norman Jaskolka, president of Aldo Group International highlights the top 10 factors to consider when expanding an international multichannel business.
As president of Aldo Group International, Jaskolka is responsible for the footwear brand’s international expansion, development and operations. Since he joined the Canadian company in 1995, it has opened 2,100 stores in more than 90 countries.
Jaskolka advises brands that want to take their first steps overseas should do so in a joint venture partnership or with a franchisee.
“First of all, to what extent are you operating in different countries other than your own?” he says. “You might be operating with 100% ownership in your home country, but in other countries you don’t have 100% ownership and that results in decisions having to be made.” Here are Jaskolka’s tips to help you make those key decisions.
1 Secure your brand
You need to protect the brand. A brand, in the online world, is going to be defined, not only from the style of the product, or the colour, but also by the overall digital experience. So consistency across channels and the execution are the armour, and it all becomes part of your brand DNA.
2 Consider costs
Securing stores on a high street in important European cities can cost a tremendous amount of money. Rents can differentiate per square metre or square foot – right away your cost of doing business is different. Salary costs also fluctuate country by country and you may have to charge more in some places to cover those costs.
3 Define your customer
Use consumer insights to “research, define and understand” your target customer. At Aldo, we ask ourselves: “If we really want to be a global brand, how do we define which are the customers that we can delight consistently?” Adjustments have to be made to adapt to some local market needs.
4 Study customer behaviour
Shopping behaviour may not be the same in every country – even the credit cards customers use may be different. If you start to develop what you think is a global approach based on a strategy that you developed in another territory – say the US – it may not be relevant to customers shopping in the UK or Europe. On top of that there are legislative and cultural rights. How long do they expect to have a product before having to pay for it? And what should the returns policy be?
5 Use data
People think of data analytics as the amount of information you get from your customer today, how you interpret that information and use it to make sure you deliver what your customer needs. Data analytics is also about understanding what sells where, interpreting weather patterns, being able to determine how much depth of a style you need and which stores you are going to send which product to.
6 Open physical shops
To think that you do not need stores is very outlandish.
Stores play a role in fulfilling orders made online, and sometimes the reason a purchase was made was because a store is nearby and therefore it is easier to make a return. Test to see the impact of closing a certain store. Did online sales go down? Omnichannel is about the combined profitability of the retail stores and the online business.
8 Strive for fashion capital credibility
For a retailer it is important to have fashion capital credibility. A brand needs to be successful in London, Paris and Milan – even in the digital world. I still believe that fashion is derived from certain parts of the world, just because of the creativity that is derived from those places.
9 Research your locations
We selected the right locations for the first Aldo shops in London [in August 2002, first on Oxford Street then Neal Street, Covent Garden]: the footfall was high and it was natural for people to want to look at something different, and therefore come into the store. These stores serve an important role of showcasing the brand for international expansion. In hindsight, the real estate was the most important decision we took.
10 Pursue innovation
It is a different era. Everything is changing so fast that there is so much opportunity in retail right now. The challenge is for retailers to be innovators in every part of their business. It is not just about finding new footwear technology to enable customers to run faster or have more comfort – it is also about innovation in marketing and how money should be spent. It is innovation in logistics: what can we do to shorten the timeframe and so on. There is so much change going on right now that makes it very challenging, but I think it is an exciting time to grow.